Rafael Grillo

The Brazilian Economic Miracle

It still amazes me to corroborate what the right government can do for a country. I've worked with Brazilians for many years, and I've always been impressed by their business-smarts, their shrewdness and their professionalism. And yet, it was always sad to see such a rich country and rather sophisticated people struggling with poverty and underdevelopment. It was hard to believe so much talent could not pull the country forward. I am glad to see Brazil's vigorous revival.

Was Peter Lynch Wrong? Crocs and Other Trendy Companies

I've written a couple of articles in my site about this same topic. It is possible to identify great companies and great products that meet fundamental consumer values and should generate significant returns over the long term by observing their action in the marketplace. By the same token, and paying close attention, it is possible as well to discern which are just fads or niche products. Nothing wrong with riding Crocs all the way to $75. But that was it. There is nothing left in that stock. The most serious financial mistakes are made when people consider these declines as buyable dips. Crocs is not a $75 disguised as a $12 one.

Penn West Energy Trust: An Underappreciated Gem

My only regret is not having purchased more Canetic Resources (now absorbed by PWE) a year and a half ago when I got to know about Canroys -thanks to Jim Cramer by the way; one of the few things I could thank him for-. Besides the dividend, that just for itself justifies the investment, the run in oil has meant a decent return in share price as well. I plan to continue holding on my PWE position. I think your analysis is right on.

Why Google Invested in Clearwire

As dominant leader in the online search and advertising market, Google's fundamental strategic opportunity to generate huge growth is to increase distribution: have more people spending more hours online. Not that different from Coke -or any other mass-appeal marketer for that matter- placing vending machines in everyone corner. In that sense, tearing down any barrier that might keep consumers off-line plays directly in Google's favor. Google will throw all its muscle behind any opportunity that allows them to capture what is now dead off-line time: think commuting, travelling, lunch, leisure, etc. Literally billions of ad/hours (clicks in their ads!) they are not reaching now. Their dominant market share would assure them by default 70% of that new revenue stream. That is the limitless promise of WiMax. All the points made in the article are valid, but basically basically point in the same direction: expanded distribution is the main driver behind these investments. This is a real smart use of resources. Gosh, they're good!

On Yahoo/ Microsoft: Jerry Yang Should Be Fired

Interesting action on YHOO today. It seesm the doom and gloom scenario didn't play out. The market is waiting for Act II and I think we will se more of this MSFT-YHOO deal. bill d: hold onto those options. You may break even. In any case, I seriously doubt YHOO has any significant future. As per MSFT, I think their corporate culture is way screwed up as to ever build a significant presence in the Web. The would simply smother anything they touch. Gosh, even their software is flailing! (Vista anyone?)

What Should Microsoft Buy Instead?

Extraordinary article! In all the intensity of this Yahoo-Microsoft almost-deal, we might have forgotten to ask the most relevant question in the first place: why does Microsoft need Yahoo? Which is to say, how come Microsoft, with all its might, has been unable to build a relevant, coherent Web presence by itself? In part, this link to an incredible video in YouTube entitled "Microsoft Re-Designs the Ipod Packaging" explains it: www.youtube.com/watch?...

Microsoft has grown to be a soul-less corporation that has lost touch with what consumers value today. Yahoo is not far behind -hence its woes-. The difference between these two companies and the portfolio mentioned in your article is that the latter includes true representatives of the Web 2.0 ethos: nimble, personal, creative, emotional. I am afraid Microsoft's corporate culture will simply smother everything it touches. It is good that the deal Yahoo-Microsotf didn't take place: most likely, it would have been another AOL-Time Warner or Sprint-Nextel.

Earnings Preview: General Motors

GM is doing the right things in terms of their product line up-and the marketing of their different brands. They have raised the bar in terms of brand equity, segmentation and product design. I've devoted several articles to analyze this turnaround in my site. The confluence of a weaker dollar, more attractive offers and innovation (moreover in their Cadillac and Chevrolet divisions) should position GM to emerge as a stronger company from the current economic downturn.

Earnings Preview: Starbucks

It is hard to believe that competition is having only a minor impact on Starbucks situation. Consumer will not drink less coffee because of the economic situation, but they will drink less expensive one. It is typical case of demand elasticity, aggravated by the fact that the quality of the competitive product (from McDonalds to DD) has not only improved, but in some case surpassed Starbucks'. Starbucks needs more than to refocus on coffee: it needs to reinvent the experience, and that is a tall order.

Am I Too Much of a Pollyanna on Starbucks?

As much as it hurts me, I think Starbucks is in a difficult strategic position. Starbucks taught America how to drink coffee. That served them well, and being the only real choice for many years, growth just followed. The problem is that they also taught their potential competitors how to prepare coffee. This is the typical cycle of disruptive innovation. The consumer now has choices, and at a lower price: not only McDonalds, but DD and other smaller coffee houses. Starbucks coffee is not the golden standard anymore. The only real advantage they have at this point is their distribution. Hard to grow on that one alone. Their real opportunity to reactivate growth: aggressively leverage their brand internationally, where the Starbucks experience is still innovative and aspirational. Until an aggressive international expansion strategy is not presented, you are better off betting on McDonald's coffee... and salads.. and burgers...